7.9.08

The Nexthealth Business Model(s) - Leave Your Preconceptions at the Door

We knew we'd need to shake people out of their comfort zones to spark hard-hitting dialogue on combustible issues like consumer-centric care evolution. We took a big risk with our particular brand of casual informality, but we think it paid off.We did a lot of things differently. There is nothing in this list your organization cannot and should not be doing before presentations/demos.

When you do things differently, it generates comments you might never have expected.

Scott Shreeve left an interesting one on the Nexthealth Elevator Pitch post asking about our business model.Scott says: "The only problem I see is that you are offering the service for free, you are giving away your technology, are not accepting ads, and you do not plan on using anonymized user information in any revenue generating way."

He's right on all counts.

"This leads to the big BM question (no, not that kind of BM) - how on earth do you plan to be around without any source of revenue. You either have a sugar daddy funding your every business whim or you will be out of business in short order. Would love to hear you describe the sustainable business model that will allow you to provide this valuable service."It's such a good question I'll answer it here.

First Scott, if you find a sugar daddy (or sugar momma) please do send them our way. We'd love to talk.

It'd be a dream come true to develop a collaborative relationship like the one enjoyed (with great results) by Jay Parkinson and Myca. Probably no one else would be visionary enough (read: crazy enough) to take us on. But who knows. There are some amazing folks in healthcare, as we discovered this week.

Second - How do we expect to make money off the Nexthealth application?

By winning the lottery of course. Or gathering a few million via a VC round. Or being acquired.

Just kidding (at least about the first one), but I think far too many Health 2.0 firms have a similar bubble approach (relying on ad revenues in a rapidly morphing marketing world or charging only for premium services which are utilized by a small subset of users).The short answer is that we don't. We're not trying to make money off the application, that's why we're throwing it out there as a public good.

Make no mistake, this isn't totally a selfless act of altruism. Many of the Nexthealth crew are more sinners than saints! Although we're social entrepreneurs working to spark change and global healthcare innovation, we realize the value of forging a new path with this sort of big splash.After articulating our mission (connecting people online and offline to improve healthcare) and vision (people will be able to access healthcare goods and services, online and offline, at will), we decided very early on there would be things we wanted to build that should be set free "open source" style rather than siloed and privatized to death.

If you allow a company to put this kind of application to bed in a corporate stable you'll make a lot of money, yes, but you're not going to get the same relative neutrality and objectivity of which a completely NFP app is capable of doing.

Read: You will not be able to generate trust among digital health natives if you're selling off data on the back end with no opt-out a la Patients Like Me, especially once your users find out about it (and who wants a Health 2.0 version of Facebook's Beacon crisis?).

They may not know PLM is doing this yet, but when users (and potentially the media) uncover this I wonder if we'll see some of the first 'negative' HIT/Health 2.0 coverage - the nascent industry may still be too young for people to understand the implications and react in a critical manner.

This is why we won't gather your data and sell it at Nexthealth. However, you WILL have the option to make it available, open-source, to public health researchers (anonymized of course). We'll provide links and you can send it to them at will, or not.

That said, we have explored a few various ways to monetize use of the decision-support search app without sacrificing the relative neutrality and objectivity of the tool.

Some ideas include click-through plans, entering the Knight News Challenge and other similar unique open-source/NFP funding grant programs, etc., but more on those later.

And besides - we've got plenty of talents, skills, and plans that can be monetized. Call us foolish. Call us idealistic. Call us naive. Call us many other things. I'm sure that will happen. We are a new kind of 'business.' We will make many mistakes.

But we're trying not to make the mistake of disguising selflessness for selfishness - an integrated "do not cull out" approach to altruism and a healthy attitude towards capitalistic profit guide our decisions in kind. If a good would cause more momentum in the public domain, we'll drop it there. If a good can be privatized, yet still work in concert with our goals, we'll do it for a paycheck.

This isn't the last application Nexthealth will produce - it's the first of many.

We're thinking ahead to sustainability for the collaborative and other projects already in the design life cycle (including others that will generate revenue). We've got multiple other plans in the works. In fact, Martijn Hulst and Jacqueline Fackeldey present some additional ideas and concepts this week in Holland. Break a leg both!

At Nexthealth, we generate a different business model, with different principals 'shepherding' the project, for each product.

You'll be seeing both more 'public' and 'private' goods developed by the Nexthealth team, sometimes in relative 'isolation' and sometimes in cooperation with other organizations.This application is the getting-to-know you handshake from our group. It's the best business card in the world - showing we're capable of producing with limited resources and extreme creative prejudice. Consider it our proof of concept, the ultimate whitepaper.In order to understand why we'd be crazy enough to do research, detail a new model, nearly kill ourselves trying to design/build an app, and then be totally committed to giving it away for free without 'commercial bias' or interference, you have to know a bit more about the group nuts enough to try this.

The short version: Maarten and I are social entrepreneurs who are part of a health innovation COLLABORATIVE (Nexthealth) with a page here. The model/application we described at Medicine 2.0 is just ONE of the projects we have in the works. The collaborative produces both 'public' NFP goods, and 'private' FP goods, and we don't separate the two in our daily business activities.

So, about Nexthealth (the group):

NOTE: I'm taking a stab here at putting 'how we work' into terms many readers can follow...some of my Nexthealth Dutch buddies may have other descriptions (Jacqueline, I know you'd die before using the "PM" acronym for instance:).1. We are a hive collaborative nonprofit founded in April in the Netherlands (following the first Health 2.0 Unconference NL) with two 'arms': NL and the US. I'm mostly US, the others are mostly Holland, although there's some definite flux.

2. Nexthealth has a core group of 6, but our initiatives almost always involve others recruited from the hives of our personal and professional networks.

A basic snapshot of how our current workflow looks:

Someone's radar picks up a project they're interested in doing. Sometimes we find it, sometimes it finds us. They bring the idea back to the group (6) - usually first via email, Twitter, Skype, and other social web tools.

Much discussion ensues. Normally the person (or persons - Maarten and I often work as a team) who introduce the idea becomes a 'Project initiator' or internal PM (except many of us call ourselves 'firestarters' - that's just the way we roll).

Sometimes the discussion is kicked offline in one of our famous meetups, but often we get rolling without having seen each other in person (ROPE and ROWE), and have multiple projects and initiatives on the whiteboard (literally) during our next face-to-face.

Sometimes the person who introduces a project just throws it out for discussion and another core member becomes the initiator.

IMPORTANT NOTE: The initiator isn't static. If a project reaches a stage where the initiator loses interest and/or doesn't have the skills/time to continue (most common), someone else picks up the ball and runs with it. We find this change happens, oh, less than 25% of the time (estimate) as we each tend to introduce things about which we're invidividually passionate.

We decide, kind of individually and collectively, if the project has anything in common with our goal and 'ideal' healthcare system: first, does it connect people, online and offline, interested in improving healthcare? Second, does it work towards semantic interoperability of health - "consumers will be able to access healthcare goods and services, online and offline, at will?" If the answer to one or both of those is yes, chances are we'll take it somewhere.

Kickoff! The project initiators (and other core members) recruit/recommend resources (human and otherwise) to complete the project. The initiator largely directs the initiative and keeps the group updated on progress via the social web.

The Payola: Sometime we get paid (for profit, "private" goods) and sometimes we don't (NFP, "public" goods). If we get paid as a group, the revenue will be split according to prearranged terms based on who works on the project. Obviously we aren't making much money yet - the group is bootstrapped for now, and each of us have other gigs outside of Nexthealth (all in healthcare).

Also Scott, let me apologize for leading you and other readers on a bit over the last few days.

Maarten and I have been working on the research/model just since the latter half of April. Things have been moving so fast we haven't provided substantive information (operations, people, etc.) about the Nexthealth group itself as quickly as we should have.At Medicine 2.0 there was so much conversation about the model (and where healthcare is going in general) that we didn't get around to specifics of business models for the group and the application.

That's no excuse, however.

I've tried to remedy that oversight here.

In addition to doing completely new research in Health 2.0 (and trying to act as a bridge between 'commercial' and 'entrepreneurial' Health 2.0 types and 'research' and 'academic' Medicine 2.0 types), we're operating under a new type of business model, a hive collaborative, with our current 'alpha' workflow process detailed above.

Also keep in mind that this is an organization just learning to hold its head up....we're in the infancy of Nexthealth. Our birthmonth is April 2008.

We recognize the org. structure is liable to morph and go through various refinements as the 6 original principal founders (myself, Maarten den Braber, Martijn Hulst, Jacqueline Fackeldey, Niels Schuddeboom, and Jeroen Kuipers) determine what's next for each of us individually as well as for the collective.

Some will stay, some will go. We'll add new members, new strategies, and new revenue streams as we learn to crawl.

But with this sort of commitment to sparking global healthcare innovation, skinned knees and elbows are inevitable. It's how we react to the stumbles that'll show whether or not we're one of the groups to be running at the front looking for what's next.

7 comments:

I attended the session at Medicine 2.0 and I must admit that I was underwhelmed. When I tried to start debate on the basic premise of Nexthealth I was shut down by the Jen and Marteen. They didn't really seem to want true debate ... they simply wanted to share their thoughts. So much for open debate.

Thanks so much for your comment and for sticking it out with us during the Nexthealth session.

It's always a challenge to encourage that sort of open debate and not stonewall differing views in a limited amount of time.

I apologize for moving away from your questions after the first few minutes - we wanted to interact with as many participants as possible, but that transition could have been handled more diplomatically.

As first-time presenters, we can certainly stand to improve our approach and will take your thoughts into serious consideration.

I'm wondering if you've been able to post your Medicine 2.0 presentation "Consumers Are Not Patients" online for viewing? (Abstract is here: http://www.medicine20congress.com/ocs/viewabstract.php?id=51)

We found your earlier Medicine 2.0 session fascinating as we have differing views on consumerism in healthcare (as well as some common ground)- particularly the statement that "healthcare is not available online," which we addressed during our presentation by using the American Well case study. For more information on their model, please take a look at www.americanwell.com.

I also found we have some interesting common ground, however, particularly the views you and I discussed personally after your session, that all patients are not consumers all the time; rather that these 'identities' are highly situational and subjective, and sometimes align. Sometimes we're passive patients, sometimes we're active patients and active consumers, etc.

In addition, when responding during our session to your idea that healthcare is different and we aren't consuming healthcare goods and services like we do goods and services in other sectors, I used the example of a 17 year old high school student shopping for a prom dress and looking for an insulin pump that would fit under her gown.

It's pure and amazing serendipity that we had an audience member with an insulin pump willing to share that she shopped for her pump the same way she shops for an MP3 player. We thank her again for her participation and willingness to share.

I also want to thank you for including participation at the end of your talk. The two questions I asked at the conclusion informed some of our presentation, namely:

1. Would you say consumerism is increasing in healthcare? To which you answered yes.

and

2. Is it possible for patients to simultaneously act as consumers? To which you also answered yes.

We're happy to continue the conversation in any number of formats, including the blogosphere, phone (301.904.5136 is my Blackberry while in the US), email (jennifermccabegorman@yahoo.com) etc.

Thanks again for your comment and your questions during our panel, and we look forward to your continuing role as an "interrogator!"

While I certainly admire both your enthusiasm and convinction, please be careful that it doesn't blind you to alternate points of view. I truly wanted to generate debate among the audience re: your opening disclaimer, not simply debate the matter myself. I felt to me like you rolled over the question in an attempt to stifle debate.

As for the insulin pump example, it is but one example and one that happens to be more or less a commodity. What about more complex services? What happens when the diagnosis isn't so clearcut or there is differing opinions among healthcare professionals? There is still much to medicine that isn't easily reproducable between different healthcare providers. Treating medical services as a commodity service I believe understates the complexity involved and leads to an over simplistic model of how healthcare services are purchased and consumed.

Jen - I just wanted to post and let you know your presentation was the most enthusiastic and engaging at Medicine 2.0. It represented to me what I hope for 2.0, while envisioning something bigger and better thru x.0.

Also, thanks for moving the debate away from Michael's comments - it was clear you were attempting to engage everyone, and Michael wasn't leading it that way. There is much to debate about what he said (I need to find a forum where I can argue against his 'Consumers Are Not Patients' premise) but your presentation was not the appropriate time or place - you recognized this and effectively moved on. Thank you.

I look forward to hearing more of your guys' ideas and beginning my participation in the venues you exemplified.

Actually, duhgee, I wanted to hear the audiences view on the opening disclaimer in the presentation. I think that it needs some tweaking. Despite appearances to the contrary, I am actually a huge advocate of introducing technology into the healthcare system AND to embracing more of a consumer attitude to healthcare. That said, I think that approaching healthcare from purely a consumer perspective will lead us down some wrong paths.

With regard to debating the consumer vs. patient thesis, please check out my blog. Jen has graciously supplied a link to the blog (Personal eHealth) on her blog.

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